BP 2015 Annual Report Download - page 164

32. Contingent liabilities – continued
The group is subject to numerous national and local environmental laws and regulations concerning its products, operations and other activities. These
laws and regulations may require the group to take future action to remediate the effects on the environment of prior disposal or release of chemicals
or petroleum substances by the group or other parties. Such contingencies may exist for various sites including refineries, chemical plants, oil fields,
service stations, terminals and waste disposal sites. In addition, the group may have obligations relating to prior asset sales or closed facilities. The
ultimate requirement for remediation and its cost are inherently difficult to estimate. However, the estimated cost of known environmental obligations
has been provided in these accounts in accordance with the group‘s accounting policies. While the amounts of future costs that are not provided for
could be significant and could be material to the group‘s results of operations in the period in which they are recognized, it is not possible to estimate
the amounts involved. BP does not expect these costs to have a material effect on the group’s financial position or liquidity.
If oil and natural gas production facilities and pipelines are sold to third parties and the subsequent owner is unable to meet their decommissioning
obligations it is possible that, in certain circumstances, BP could be partially or wholly responsible for decommissioning. Furthermore, as described in
Provisions, contingencies and reimbursement assets within Note 1, decommissioning provisions associated with downstream and petrochemical
facilities are not generally recognized as the potential obligations cannot be measured given their indeterminate settlement dates.
The group generally restricts its purchase of insurance to situations where this is required for legal or contractual reasons. Typically, losses will
therefore be borne as they arise rather than being spread over time through insurance premiums. Some risks are insured with third parties and
reinsured through group insurance companies. The position is reviewed periodically.
33. Remuneration of senior management and non-executive directors
Remuneration of directors
$ million
2015 2014 2013
Total for all directors
Emoluments 10 14 16
Amounts awarded under incentive schemesa14 10 2
Total 24 24 18
aExcludes amounts relating to past directors.
Emoluments
These amounts comprise fees paid to the non-executive chairman and the non-executive directors and, for executive directors, salary and benefits
earned during the relevant financial year, plus cash bonuses awarded for the year.
Pension contributions
During 2015 one executive director participated in a non-contributory defined benefit pension plan established for UK employees by a separate trust
fund to which contributions are made by BP based on actuarial advice. One executive director participated in 2015 in a US defined benefit pension plan
and retirement savings plans established for US employees.
Further information
Full details of individual directors’ remuneration are given in the Directors’ remuneration report on page 76.
Remuneration of directors and senior management
$ million
2015 2014 2013
Total for senior management and non-executive directors
Short-term employee benefits 33 34 36
Pensions and other post-retirement benefits 433
Share-based payments 36 34 43
Total 73 71 82
Senior management comprises members of the executive team, see pages 60-61 for further information.
Short-term employee benefits
These amounts comprise fees and benefits paid to the non-executive chairman and non-executive directors, as well as salary, benefits and cash
bonuses for senior management. Deferred annual bonus awards, to be settled in shares, are included in share-based payments. There was no
compensation for loss of office included in Short-term employee benefits in 2015 (2014 $1.5 million and 2013 $3 million).
Pensions and other post-retirement benefits
The amounts represent the estimated cost to the group of providing pensions and other post-retirement benefits to senior management in respect of
the current year of service measured in accordance with IAS 19 ‘Employee Benefits’.
Share-based payments
This is the cost to the group of senior management’s participation in share-based payment plans, as measured by the fair value of options and shares
granted, accounted for in accordance with IFRS 2 ‘Share-based Payments’.
160 BP Annual Report and Form 20-F 2015